What drives investment in automation technologies? This paper documents a positive relationship between labor … substantial share of cross-country variation in automation. The relationship between institutions and robots is stronger in sunk … invest in automation is to thwart rent appropriation by labor. As a consequence, policies aimed at supporting workers …

a sample of advanced economies. Institutions explain a substantial proportion of cross-country variation in automation … vulnerable to holdup. This suggests that automation is used by producers as a tool to thwart rent appropriation by labor …